Geek magazine hacker daily blog

Social networks, finance and robots: As the trader earned $2,4 million in 28 minutes by means of one tweet

1 year, 2 months ago


A few years ago one London hedge fund started the new project so-called "Twitter fund". The special computer system read 100 million tweets a week and defined a situation with the current economic trends on their basis.

If the general tonality of the message was positive, the fund took shares and if negative — that the probability of falling of stock market increased and it was necessary to think of sale of shares.

Invention it was awful — the fund warmed up in two years. However, perhaps, the idea was not so bad — managed to earn by spring of 2015 of one their traders in only 28 minutes more than $2,4 million, using a microblog service as a source of news.

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Santa Claus's rally: As New Year's holidays affect stock market

1 year, 3 months ago


The behavior of investors in stock market is influenced by a set of factors — economic and political news, progress or failures of the specific companies, and even the season is simple. For example, many participants of the market believe that during the period preceding New Year's holidays on exchange platforms growth is far more often observed. This phenomenon received the name "Santa Claus's Rally", and today we will consider such phenomena in more detail.

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Why the companies carry out IPO: Pluses and minuses

1 year, 3 months ago


In the last several years on the Internet the subject IPO is widely discussed — the output of the company on the exchange often is considered as confirmation of its success. In spite of the fact that often and happens, the output on IPO has both the obvious benefits, and certain minuses and difficulties to the company — today we will consider this question in more detail.

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Too fast to fall: Whether high-frequency trade promotes emergence of failures at the exchanges

1 year, 3 months ago


The head of the IT company in a good shirt and krichashche expensive watch pressed the button installed at the New York exchange (NYSE), having included a bell which signals about the beginning of new trading day. Milliseconds later later first transaction, orders on purchase and sale began to rush between exchange servers at a magnificent speed. Transactions, obviously, were unusual. They were performed in the small portions approximately on 100 events which belonged approximately to 150 different financial products, including securities, in auction of which of usually special activity is not present. In only three minutes the total amount of auction twice exceeded average values of the last week.

Soon the difficult computer programs used by financial firms began to go crazy. They took the underestimated shares as unusual transactions rolled their price, and sold revaluated as their price seriously grew. Algorithms scented blood, and traders people joined them.

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IT specialist's hobby: As system administrators and project managers become creators of trade robots

1 year, 3 months ago


After 100 hours of programming which lasted for three months Mike to Sula (Mike Soule) was ready to start of the project. At the same time, he did not know what to it to expect — if everything went as it is necessary, then in the future the financial success could wait for it. And if not, then he could lose all the accumulation.

It worked not on mobile application or the next online store. He created the program which has to buy and sell shares 24 hours a day 5 days a week.

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Investigation: Whether the trader of UBS directed the financial plot largest in the history (Part 2)

1 year, 3 months ago
Note of the translator: In our blog on Geektimes we tell about work in stock market, we describe how it is influenced by different technologies, and also we sort situations which help to understand the device of the industry of finance better. Today we present to yours the first part of adapted translation according to the link.



The concerned friend of Heys sent it article from Wall Street Journal, but that ignored it as irrelevant: fraud of LIBOR in dollars had no relation to its trade portfolio with LIBOR in yens. In September, 2008 by that moment as Lehman Brothers became the bankrupt, Heys's system worked even better, than earlier. The monetary markets – cardiovascular system of the financial industry – slowed down the work as banks refused to issue each other loans and postponed the means, in fear expecting that someone from their colleagues will not worry this night. Every day originators of a rate of LIBOR did not know what value should be published, and as a result of steel to depend even more on opinion of brokers who, in turn, were bribed by Heys.

The only problem was their payment which had to be so high that those remained are correct Heysu. On September 18, when the market stood waiting, there was a small window during which the markets of Tokyo and London were open. During this window of Heys could not find in any way transactions which were rather large to pay all who had to receive the fixed salary for the works. And here to it the new thought came to mind. He called one of the brokers and suggested to carry out the so-called dummy transaction during which both parties establish transactions through the broker so that any of the parties from this transaction receives nothing, at the same time writing off the commission for the account of the intermediary. Carrying out such operations is forbidden by many firms as no commercial purpose serves and is only method to transfer large volume "бро" – the slang term which designate the commission.

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Investigation: Whether the trader of UBS directed the financial plot largest in the history

1 year, 3 months ago
Note of the translator: In our blog on Geektimes we tell about work in stock market, we describe how it is influenced by different technologies, and also we sort situations which help to understand the device of the industry of finance better. Today we present to yours the first part of adapted translation of a longrid of Bloomberg about Tom Heys's stories, the former trader of UBS bank, successful "Rain man" of stock market which appeared in the center of scandal and got 14-year prison penal for a manipulation LIBOR rate. Important: material rather volume therefore on its reading certain time will leave.



In a deserted trading floor in the building of the Tokyo branch of the bank of UBS Tom Heys sat, having stared in one of eight monitors opposite to it. The crumpled collar, the pale tired face and hair tousled from a habit to finger them during reflections – the British trader was disheveled stronger than normal. On a calendar was on September 15, 2008, and as he remembered later, all looked so as if there came the doomsday.

At Heys's dawn the call from his chief who asked it to be immediately in office woke. The New York financial Lehman Brothers conglomerate was close to bankruptcy. Sitting at the table, Heys watched how the world learns about these news and gradually panics. At such moments of Heys plunged into a semiconscious status, quickly processing a flow of the arriving information in the head and thinking of how it is better to get out of current situation.

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How to save finance: Methods minimization of risks at investments at the exchange

1 year, 4 months ago


In our blogs on Habré and Geektimes we write about exchange trade much — we sort algorithms of trade strategy and we tell about the existing technologies. However many people are frightened off by risk to lose the money at investments — especially if it is about savings.

In the modern financial market exist about effective methods of minimization of such risks up to their complete elimination — and this is not about bank deposits. For example, the individual investment account (IIA) and the structured products concern to them.

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How to purchase currency at the price "from the future": Futures and forwards

1 year, 4 months ago


In our blog on Habré we already told about derivative financial instruments and, in particular, futures. Today we will talk about how these tools in application to currencies work.

Back in the future: forward contract


Not the most obvious thought, but currency rate for date in the future is not unknown value — it is known right now. Of course, this is not about a prediction of what the course of a certain currency will be in reality — only psychics or analysts (can do such predictions and, when forecasting a course for specific date between them not such big difference).

The price at which it is possible to make the transaction with currency with calculations in specific date in the future is known. And such opportunity is given by both banks, and the Moscow exchange is the future/forward contract fixing the price (currency rate) of date in the future.

Such contracts on purchase and sale of currency for any dates consist many years banks and their clients. It is convenient for business — signed the contract for delivery of the equipment, the forward purchased, and it is not necessary to worry about possible rate movements "not in that party".

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Output from a shadow: As there are new exchanges

1 year, 4 months ago
Note of the translator: On Habré we published adaptation of the best-seller of Michael Lewis which tells about influence of high-frequency trading on a financial system in our blog. Now heroes of this book want to create "the exchange what it has to be".



On September 16, 2015 the Commission on securities and the exchanges of the USA (SEC) declared that the IEX company is going to become public stock exchange which will carry the name Investors Exchange (The exchange of investors) [1]. IEX and its executive director Brad Katsuyama are known as heroes of the book of Michael Lewis "Fast boys" (Flash Boys): stubborn idealists who found fraud on securities market of the USA and decided to correct a situation. So they based the dark-pool. Now they want to make of it this exchange.

What is a dark-pool
Darc pool (dark pool) call liquidity or trade amount which is hidden from most of participants of the exchange market.

The considerable part of dark-pools forms transactions of large payroll companies and funds, information on which is not output to the general trading floors. Similar transactions, as a rule, pass through alternative finance networks (ECN) or directly between players of the market.

There are several types of dark-pools.

  • The independent companies created to offer to clients unique terms for exchange trade treat the first.
  • Broker dark-pools can be created by broker companies, inside dark pools auction goes between clients of one broker.
  • Darc pools of exchange platforms — sometimes dark pools are created also at the exchanges which want to give to some clients certain benefits thanks to anonymity and closeness of auction.


Why IEX wants to become the exchange? One of the reasons is that founders see in IEX not just business, but also the mission. Katsuyama, apparently, tries to improve functioning of the markets, and its command can make it only as the exchange, but not as a dark-pool. Especially, the phrase "dark-pool" guards a little. If you want to change how people conduct auction, do it by the light of day.

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